I am watching a short sale go through the process in my family, so this article is very timely and informative.
The gross sales price on the foreclosure seems high though. I would think it would be inline with the other gross sales prices, assuming they all took roughly the same time frame.
Vike: US education, but they don't list his citizenship. I have no problem with the house of Morgan. No problem with Bell. No problem with Edison. Not even with Gates. I got a problem with Reagan dismantling antitrust enforcement, but the pendulum never stops swinging.
you're not over looking what Phil Gramm did in '99 are you? He and Leach and Bliley all had their names on that piece. You know, the one Clinton signed.
Now look where he is:
As of 2009, Gramm is employed by UBS AG as a Vice Chairman of the Investment Bank division. UBS.com states that a Vice Chairman of a UBS division is "...appointed to support the business in their relationships with key clients."[30] He joined UBS in 2002 immediately after retiring from the Senate.[31]*
Kick a dog and he'll piss on your leg. Chunk a rock at him and you'll expose three other dogs to daylight. They're all dogs, dirty, low down, yellow dogs. And not a dime's worth of difference between them. It doesn't matter where Lipsky is from. He's from under the same rock as the rest of 'em.
I can't even remember which one was called the Teflon President. Hey, I voted for Barry Commoner, Ralph Nader, etc. Supported Kucinich this time around. Can't remember a single valuable reform Clinton made, although the body count was fairly low.
I will be surprised if they stay or hear it. She's a loyal troop, wouldn't want to piss off the wrong people. She, like most others, wants to hang on to the bitter end. Wouldn't be fittin' for one of her peers to stop by one day and 'suggest' anything.
Time still to revisit the land of Johnny Lee, from about 11:30 PM.
"Le Rouge et Le Noir: Chronique de 1830.The red and the black of the title are the contrasting colours of the uniform of the army and the robes of priests. "
Lawyerliz: "Red is the color of religious authority. Hence the red of cardinals. It was prolly very expensive
at the relevant time period."
Ah yes, the Revolutionary French took Parisien red and blue and Bourbon white in clawing back land from the Catholic Church, and why not go with a trend.
Blue and white go back to King David. Caesar took crimson, right? Sorry Liz, I gotta go with red as state authority, which the cardinals viciously guarded for a long time.
Don't know if cramdowns would get much support from the CR crowd, w. I certainly don't support the concept. Foreclosure isn't the end of the world. Renting really isn't that bad!
No by rule they had to go to Ginsburg first. It takes four, and she looks bad denying cert if they hear it and it influences BK law, which even Ben Stein knows is important these days.
Part of the frustration with short sales is that banks and lender/servicers all have their own different policies and procedures when it comes to processing and approving short sales. Tanta gives us a snapshot of the human elements that go into a short sale approval.
Lately I'm hearing that high BPOs (broker price opinions, which are somewhat like a mini appraisal) in some markets are slowing down the short sale approvals.....unless the home is closer to the trustee sale date.
Vive Tanta's work.
I miss reading her long posts on Saturday or Sunday mornings. This ought to make some readers happy tomorrow morning.
From watching here in California, I think "in general" servicers are much more short sale friendly now (relative to 2008). I'm not saying it is speedy, just better now than it was in 2008. On the cleaner, single loan or even multiple loan but purchase money (no recourse to the borrower) contract the servicers have streamlined the process much more. I also think agents have gone through the learning curve and are navigating the process better then they were previously and that helps speed up the sales as well. With multi-loan refinanced (i.e. there is recourse to the borrowers) properties is where the longer wait times happens. Not all servicers / investors have their stuff together.. but in general there has been vast improvement in the last year. I've seen pre-approved short sale properties close escrow in a week from offer to close of escrow (all cash offer).
I don't recall a single Supreme covered in red. Those magic black robes. Presidents not so lucky. I know, Nixon set up LBJ's guy Fortas, but it isn't easy. Ginsburg has branch loyalty too, don't forget.
I used to know the procedural rules, passed the bar with flying colors, but now I mainly follow the bigger picture.
I got another fitty here, good odds even for non-gamblers...
"The recession is driving the safety net of government benefits to a historic high, as one of every six dollars of Americans' income is now coming in the form of a federal or state check or voucher."
Louis D. Brandeis once said something like, "full disclosure is the best medicine and a light bulb the best policeman." Tanta has turned on a light bulb in the area of housing "short sales". Needless to say, more "medicine" and "policeman" are needed in other financial areas, too.
Somewhere in today's comments here, someone posted the NYT piece in today's or yesterday's paper about the need for full disclosure in other areas of financial transactions (stocks, especially block trades, simple and complex derivatives,etc). With each passing day, trading of these instruments remains opaque. "Clouded" trades mean wider spreads(equals higher profits) and more asymmetric information (equals higher margins for those with accurate information). Traders learned their lesson years ago when bid-ask spreads on the NYSE collapsed to penny differences between the bid and ask: there was no longer hardly any profit trading listed stocks compared to the risks. Now the good times are returning, where no one can tell if front running is occurring on "dark matter" trading venues or whether the price paid for a CDO is in line with the price paid at the upstairs trading desks where prices never get reported.
The authors are correct: all trades should be reported clearly and completely and traded only on exchanges where each and every trade is exposed to competition and price discovery.
A profitable, but unhealthy Wall Street depends on limiting competition and information about a trade, a financially healthy America depends on the quite the opposite.
Why limit it to stocks? Trade in anything that doesn't implicate privacy issues should be recorded to an open source database. The bots can handle it, the grocery store does it now with bar-codes, and privacy can even be accommodated.
Only has to work better than the next best thing. Those banksters didn't need gunpowder to get their bailouts, they just tied themselves together at the hip (the big sticks still do their talking, I realize).
BH if you sign a contract longer than 6 months, and you have any leverage, demand a CPI factor. Weren't you the guy who mentioned that French technology writer on the speed of information?
The only thing I know about the IMF is the Third World seems to universally hate them.
If you offer an habitual poker player the choice between paying $50 up front for the seat for a whole day and night, or $4/half/hour, he'll gladly get nickel and dimed, even if he knows he's going to play for 12 hours. He can do the math in his head, but he won't.
The minimum payment scam preys on even people who should know better. Sometimes it takes two to form a debt slave relationship, but in a lot of places it only takes a couple of holes in the social safety net.
"Here, the Debtors have established a good business reason for the sale of their assets at
the early stages of these cases. Notwithstanding the highly publicized and extensive efforts that
have been expended in the last two years to seek various alliances for Chrysler, the Fiat
Transaction is the only option that is currently viable.[emphasis mine] The only other alternative is the
immediate liquidation of the company. Further, the whole enterprise may be worth more than
the sum of its parts because of the synergy between Chrysler, which provides its network of
dealerships, its productions of larger cars, and Fiat, which provides the smaller car technology,
and the access to certain international markets."
OK for starters, it's bass ackwards. If a sale to Fiat is currently the only option available, that's a reason to delay the sale, not rush it. Polaroid's creditors just got a quick sale thrown out because there was no bidding process. Maybe Chrysler shopped itself to every carmaker in the world, but the Judge doesn't say so. Only a vague "In that regard, no bidder other than Fiat came forward." "Network of dealerships" is weak. The old dealership model is dead. Most Mercedes buyers already or will soon order direct from the factory. Access to international markets for big Chryslers? Didn't do much for Daimler. The Chinese already have their Hummers (unless their regulators nix it, which is likely).
(cont.
"Moreover, the Debtors were forced to cease operations in order to conserve resources.
That action, however, was done with a view towards ensuring that the facilities were prepared to
resume normal production quickly after any sale, and that consumers were not impacted. Any
material delay would result in substantial costs in several areas, including the amounts required
to restart the operations, loss of skilled workers, loss of suppliers and dealers who could be
forced to go out of business in the interim, and the erosion of consumer confidence. In addition,
delay may vitiate several vital agreements negotiated amongst the Debtors and various
constituents. Thus, approval of the Debtors’ proposed sale of assets is necessary to preserve
some portion of the going concern value of the Chrysler business and to maximize the value of
the Debtors’ estates."
"loss of suppliers and dealers who could be
forced to go out of business in the interim,"
Might be a good thing. Let them reorganize and make better deals with New Supplier and New Dealer.
There are no numbers given for the extra costs from delay so there's no way to evaluate the Judge's arguments. A quick sale to get production running again doesn't give me confidence as a consumer. I'm buying a $20,000+ item which can kill. Take your time, get it right.
"Here, the Governmental Entities, as lenders of last resort, are dictating the terms upon which they will fund the transaction, thereby leaving the Debtors with few options. Nevertheless, the usual marketplace dynamics play out and the Court applies the same bankruptcy law analysis. Moreover, the Debtors' CEO testified that the demands from the Governmental Entities were not greater than that presented by other lenders, and in some aspects were not as onerous.... "
Yeah that's the problem Judge, they're playing with TARP taxpayer money. Courts should take extra care to make sure bidding processes are respected and not rushed, given the potential corruption.
"I'll give you a special first draw right, Nicolas, if you'll take my note for a bit. Shall we say pistols, Chunnell at dawn? I'll bring my Balls, as second. Tim has a bazooka, but Putin has become a hard money honcho, and who knows what Hu will bring. Those guys actually still make things with their hands."
Don't get me wrong, I'd rather see TARP money go to just about anything more productive than a bank, but corporate bk is a bailout already, no need to cut corners.
The sale price of 92% is pretty optimistic. Take it down to 55% - 90% financing and 50% reduction fro peak sale price - and your loss calculation comes to 97%. Granted, legal fees on a more expensive home will be a smaller percentage. Look at condos too where the price may be 1/3 or 1/4 of peak, and many more of those used 100% financing.
Lenders that were 'walking away' from short sales were using the same judgment they had used in writing the initial loan.
Gresham's Law states that bad money drives out good money, and as a consequence it takes a bunch of bad money to get a meager amount of good money.
Confusing, but not really.
The Romans showed the way, way back when. I think they had the first bad money, a Denarius Alchemy Derivative.
The empire's money was copper, silver & gold. There were many denominations of copper coins, but strangely enough, only one denomination each of silver and gold coinage. The ratio was set @ 25 silver Denarii equaling 1 gold Aureus which lasted for hundreds of years. Like our current empire, Roman forts were far-flung and costly to maintain. The army had a long history of being paid for their efforts in silver Denarii, and the silver coins for several hundred years were of high fineness, (approx 95% purity) and as the accounts receivables weren't matching up with the accounts payables after the salad days were through, the debasement of the Denarius began, dropping down to 65% pure. The problem with debasing silver was you could only do baby-steps, for if you went too far in your efforts, and say, got to a 65% copper-35% silver mixture, the resulting coin would look more like copper, whoops~
Enter high technology...
Some wizard figured out how to silver-wash (a crude form of electroplating) copper coins, allowing the empire to produce Denarii with just a scintilla of silver in them, and the chimera ruse worked for awhile, but people got wise, and so began the great devaluation of the Denarius~
By about the middle of the 4th Century a.d., it took about 3,500 Denarii to equal 1 Aureus.
A more current example of Gresham's Law would be any Dime, Quarter or Half Dollar dated before 1965, consisting of 90% silver. Each of these denominations of which billions & billions were produced, now has almost 10x the face value in current bad money (copper-nickel coinage or paper money) in just silver content alone. When was the last time you received a pre-1965 silver coin in change?
Gresham's Law was in regards to metallic money, but in our world it's not so easy to decipher the good & the bad, as our money is more like mysterious neutrons than anything else.
So how does one differentiate between and betwixt what exists now in our digital world?
As ever more massive amounts of national financial symbolism are churned out via the mouse click, the only thing it does is mix with previously thought of good money and dirty it, but can you tell the difference?
Bloomberg is cute: retail sales up in May!
Minor detail: Chryslers unloaded at any price. Haha dump it on the pension fund. Taxpayers got 'em covered...
The thing Tanta doesn't talk about is the consequences of the lender and servicer accepting a short sale. The lenders by accepting a short sale are forced to acknowledge a theoretical loss as an actual loss. Even delaying a mere month or two they are protecting the lender's balance sheet and continuing to book servicing revenue. In the case of the non-delinquent short sale the difference to the books and revenue stream is huge.
Shorts and realized losses become material to the lender's portfolio and therefore the underlying asset class to the rmbs house of cards when? Sure, no one likes to book losses when vapor gains can mean real returns, but where's the material point?
What furnaces, what anvils, are not groaning with the forging of chains? That is how our iron is mostly used; and you may well fear that ere long none will be left for plough-shares, none for hoes and mattocks. Happy were the forbears of our great-grandfathers, happy the days of old which under Kings and Tribunes beheld Rome satisfied with a single gaol!
When the energy bubble v2 pops this summer the Loonie will migrate south. NatGas revenues in the face of storage capacity are going to hurt and high cost sources will shut pushing unemployment up.
Anyway back on topic. "Shadow inventory" could better be described as induced loss exposure. If lenders start short sale transacting they might open the flood gates to more. Not in their best interests as long as loans are performing. IMO the lenders think they are managing their portfolios correctly from a macro perspective by not addressing individual situations until they become critical.
Lenders here are more short sale friendly, but actually doing the closing is agony.
The Lender's employees /agents haven't the slightest idea of what they are doing
and I see no evidence they are learning. The buyer's lender also has no idea what
they are doing either, except they are scared to death of making loans. Loans disappear
into "underwriting" for day, weeks, I guess in the hope the borrower will give up and
go away. Nor can you find out what the problem is. Finally they render a decision, which
usually involves asking for more paperwork, which could have been asked for
long ago, and then it disappears back into underwriting
again.
In the mean the REO lender's ignorant employees who neither know or care what
is going on, on the other side, give extensions of time one Chinese water torturing day
at a time. They conclude that the buyer is stalling or can't qualify, and not that the Lender
is and wants to be a collection of poorly paid ignorant jerks, who are terrified to make a
decision. Most of these buyers do qualify under FHA rules, and most of the properties
do appraise out.
Finally Tanta's summary does not take into account the high probability that the property will
drop significantly in value. Not only did that happen but here in South Fla, we prolly have
another 5-10% more to go. That of course involves a guesstimate, ie, thought, which
lenders are not capable of doing.
Had the lenders thought about it for a bit, they might have come to the conclusion that they
weren't anywhere near the bottom and granted a lot of concessions a year ago. They
would have lost less money. It is too late now. The walkaway mentality here is totally
accepted.
But someone would have had to make an unpalitable decision. Can't have that.
Can someone explain to me the following from her example: 37% pre-foreclosure expense; 43% post-foreclosure expense. How does that come out to 14,800 and 17,200? I'm confused how the math adds up.
Okay; so I see she's saying of the $40k total loss; 80% of that loss is in the foreclosure expenses. Sorry I was confused a bit, still trying to sort out some conclusion.
Risk appetite is quickly sated with a nibble on short sales, especially seeing as a Govt. response is still being formulated. There are more delicious entrees to be found elsewhere..
This is a dead horse. The cleanup will be socialized.
I can't entertain even for a nanosecond that anyone here would invest in short-sales workouts. Its laughable.
What I'm hoping for is after the next drop in housing values the lenders capitulate in the face of cascading losses and continuing inventory. We see it all the time in so many aspects of financial decisions. They ignore, delay, bargain and finally capitulate. When the lenders discover that they don't want to be property managers that will be the time. It will happen faster in high carrying cost places, those with high property taxes or HVAC loads but it will happen everywhere unless banks get regulatory relief from government which will delay the process and increase the losses.
If I had a quantity of a highly desired collectible, it would behoove me to slowly release them into the marketplace, for if I were to flood the market with 1,000 cherry 64' GTO's, or 500 Brasher Doubloons or 200 upside-down Jennys, the market would collapse in each instance...
The Unabankers are not only hiding losses by holding back foreclosures, they are delaying home values from pile-driving into the ground.
They are starting to capitulate here, but the capitulation takes the form of all kinds of
weirdness.
I posted before, but there is still no end to the story. Buyer waterboarded by lender, but is clear to close,
a couple of days late, after contract. Seller puts the property back on the market, for 29k less. Buyer finds
out and doesn't want to pay previous sale price. There are all cash offers (maybe they aren't really, here
in fraudulent Florida) for the 29k less. Seller sez they will sell at lowered price to anybody but old Buyer.
Seller capitulates and is now selling for 24k less to old Buyer. Old Buyer has a family emergency in
Guatemala and has to leave town. I do a Power of Atty which I warn nearly nobody accepts. Buyers'
bank doesn't say yes or no to P of A. More time passes. Buyer comes back from Guatemala.. . .
No package yet. Will contract run out again. Will Seller lower the price again, unnecessarily.
Oh, and nobody has told the lender that now they have to loan less, safer loan, for fear this will
trigger unknown craziness and refusal to close. Hmmm, appraial no good any more? Too high?
Must do it again. Must go into underwriting again . . .
It seems like $10 an hour has replaced the $25 an hour jobs, and 3x annual salary for a home @ $10 an hour means there's a whole lotta pile-driving price demolition derby still to watch...
If you had those collectibles, you would not necessarily have a desparate need to unload them quickly for money.
But if you did and If you had some one about to breaka your knees,
you might offer the batch to the creditor, with an explanation
of how to get rid of them slowly. It might be accepted. Your knees might be saved. None of this logic applies to
any of the parties involved.
Banks are not in the houses business. They are in the lending business. For them trading in houses is fraught with peril. They know how to trade paper, it's what they do. The idea of houses as desireable objects is tarnished in the eyes of the beholders and the banks don't want to even be holders.
Like it or not they are now in the house selling business for the foreseeable future, and
they'd better learn to do it well, or they are up the creek. Well, they already are up the creek,
further up an even more polluted creek?
Somebody days ago, regarded individual house selling is 'granular". Yep.
Houses are not a symbol. They are individual unique material objects. This makes
them harder to deal with than money. It means that people have to be hired to
take care of them and sell them and make decisions. It means that they can't
do things the old lean way, or they will lose even more money.
So it means that they will lose even more money.
Rotten house meme anyone?
It means they won't even try to get a receiver appointed in the case of
rental property. Which is good for my clients.
-- Like it or not they are now in the house selling business for the foreseeable future, and
they'd better learn to do it well, or they are up the creek. Well, they already are up the creek,
further up an even more polluted creek? --
The house (re-)selling business has been collateralized has been trading for pennies on the dollar.
Smart banks have taken their write-downs and moved on.
Much of the pre and post foreclosure expense is interest, not paid or foregone because there's no
income stream. Houses need to be kept in repair. In some cases water needs to be flushed through
pipes. None of this is parasitic, just necessary. And the repair part has mostly not been done.
dont you believe it (profile) wrote on Sun, 6/7/2009 - 7:28 am
-- Name one. I will put my money there. --
Credit Suisse for example swallowed the bitter medicine early, largely and frequently.
My understanding of the Baltic States issue is that it is one of Sovereign Currency Risk, and not tied specifically to any Swiss Bank. The majority of the Fonds were underwritten by Austrian banks. But many of those Austrian bonds were issued in CHF.
As Switzerland continues to intervene in their currency market to ensure a weak Franc the Lativian situation may not be all negative.
Counterpointer: re: Coppock (coprolite!) maneuver:
"Mr Coppock looked at bear markets as akin to personal bereavements and decided to use the average time it takes to mourn a death (11-14 months) as the basis for his measure.
Accordingly, the Coppock indicator is the sum of a 14-month rate of change in an index and 11-month rate of change. This is then smoothed by a 10-period weighted moving average."
ROFL!
It's a hopped-up bandpass filter. That's FIRritating.
In light of the substantial challenges that emerging market corporates
face, maturemarket investment managers are loath to allocate resources
toward the corporate debt market. Emerging market corporates had not
yet become an established asset class prior to the crisis, with
relatively few funds benchmarked to the main emerging market corporate
indices. Now, most corporate bond funds have been suspended, with
only a pool of fairly illiquid assets remaining under management. The
overhang of illiquid assets, combined with the general retrenchment
from emerging market assets, will make it difficult to regenerate an
investor base for emerging market corporates that could underpin a
revival of primary markets. Domestic financing is not likely to be a
sufficient substitute.
In emerging Europe, corporate external refinancing needs for 2009 are
especially large relative to the size of domestic credit
markets. There are hardly any markets for domestic corporate bonds in
emerging Europe, and external private refinancing needs amount to more
than 50 percent of domestic bank credit to the private sector on
average in the region.
Not so good, but probably a better bet than houses.
Liz,
Often when you "finish" a unit or building you trigger loan covenants. Thus you see a lot of desperate developers on the verge of finishing but not quite.
Juvenal Delinquent (profile) wrote on Sun, 6/7/2009 - 8:23 am
I wonder what Wheel of Fortune is like in Lithuania?
You really get your money's worth when you buy a vowel...
"Are there any umlauts Alex?"
"Yes! 14 of them. Pick up that trip to Khazastan and spin again."
My small developer buddy finished--they have co s--a couple of houses about 2 years ago. One had no mtg.
One did. When finished, you are supposed to get permanent financing. They have not been hounding him.
They are happy to get his monthly payment and leave it at that.
I doubt that lenders of millions on a big condo building would be quite so forgiving, understanding, and
sensible. Moreover, where are the developers gonna get the huge interest money?
"Often when you "finish" a unit or building you trigger loan covenants. Thus you see a lot of desperate developers on the verge of finishing but not quite."
Mexico becomes U.S.
Go to any city down under, down Mexico way and you'll see construction halted in nearly done buildings. I remember watching a hotel finally getting finished over a 10 year period in Rosarito Beach, but also many other structures abandoned in various stages of completion-to fully completed buildings...
They are very nice looking from the outside. I wouldn't mind buying one for 10 cents on the dollar--if they were sold
out and a huge maintenance cushion was provided.
Liz,if you buy the entire Condo building (empty) you can rent it out,then move to lease/purchase with the tenants who qualify.I think the condo's here in CA are usually better built than the SFR's since they had to pass inspections after meeting tougher codes.Many SFR developers in CA were allowed to hire their own inspectors because county inspectors were overwhelmed...the quality of many recent houses is AWFUL,they will require multiples of the usual maintenance costs and in some cases are not worth even trying to fix...2 and 3 year old places that sold for $500k plus...
I had been talking to some 'bank agents'... realtors working closely with banks trying to find income property near the U of Minnesota [my kids will be captive renters there for at least three years]... this sums it up pretty well:
"My view is that, realistically, only the short sales with delinquent owners stand much of a chance of getting “passed” by servicers, and those few are being overtaken by events, namely, such a rapidly falling price environment that it’s hard to get that $84,000 bid and make it stick long enough to close the deal. This part is where servicer inability in so many cases to “just pull the trigger and close the deal” is hampering things, that being mostly a result of securitization rules requiring servicers to get investor/trustee approval, plus the endlessly updating numbers on those “models” that the servicers are using to find the “trigger point” where a short sale makes sense." - Tanta
My contact told me they still have a difficult time pulling the trigger - that in effect not much has changed from the time Tanta wrote this. As a result almost all go into foreclosure and experience additional 'loss'.
Nothing much changes - the rock goes around and around the sun, we live and die, and not much in the way of human psychology ever seems to change.
Imagine the mindset of the average J6P or his fetching bettor half Jane Chardonnay?
A good percentage of these palookas were meant to be renters, but slipped into home ownership only via the one-size-fits-all credit looseness-and paid nothing down, and are about to get foreclosed on, and you and I can look at it rationally and see they are a year behind on payments and sinking fast, but for J6P and J.C., they are losing THEIR home, which never really was in the first place.
The clock is striking midnight for many a Cinderella Story...
I seriously doubt that the average borrower could even read Tanta's article, much less understand it. Most people do not behave rationally or do any kind of planning at all - it's all emotion with them - and the car salesmen and furniture salesmen and jewelry stores are all counting on them too!
Its a puzzling question, "how does one bootstrap a service economy"? In the '30s USA had an industrial/agro economy. If it is necessary to transition from a stable industrial base to a service economy again, then lord have mercy on America.
California may be broke, but at Livermore they have the National Ignition Facility... Never heard of it? Probably most Americans would not have a clue - but they are paying for it - and after you see it you can only imagine what it cost to build...
I miss Tanta.
Any other gems lying around?
NorkaWest, I miss her all the time. But rediscovering this was great - and it is still very relevant.
Best to all
Damn interesting!
Btw., you all see the NYT article ' The Economy Is Still at the Brink
By SANDY B. LEWIS and WILLIAM D. COHAN' yet ? Tanta would have liked it believe.
Well, the banks need a premium for long-term deterrence. Until they ditch the First Amendment debtors are free to chat, and assemble.
Twitter: "They gave ol' Timmy G. a short sale, we want our cheese-ponies."
I am watching a short sale go through the process in my family, so this article is very timely and informative.
The gross sales price on the foreclosure seems high though. I would think it would be inline with the other gross sales prices, assuming they all took roughly the same time frame.
Just one more reason why the "regulated utility" model is more efficient for mortgage lending and other major banking functions.
OT? maybe, maybe not:
IMF Says New Reserve Currency to Replace Dollar Is Possible - Bloomberg.com
Where's Lipsky from?
Not giving the nationality of an IMF official is like leaving off the D and R of an obscure Congressman.
Now Broward will say, "When they say drawing rights they mean pistols".
debtfree: here's a link:
OP-ED CONTRIBUTORS; The Economy Is Still at the Brink - NY Times
yog: Lipsky bio
not surprising, his history, wot wot?
John Lipsky -- Biographical Information
Vike: US education, but they don't list his citizenship. I have no problem with the house of Morgan. No problem with Bell. No problem with Edison. Not even with Gates. I got a problem with Reagan dismantling antitrust enforcement, but the pendulum never stops swinging.
you're not over looking what Phil Gramm did in '99 are you? He and Leach and Bliley all had their names on that piece. You know, the one Clinton signed.
Now look where he is:
As of 2009, Gramm is employed by UBS AG as a Vice Chairman of the Investment Bank division. UBS.com states that a Vice Chairman of a UBS division is "...appointed to support the business in their relationships with key clients."[30] He joined UBS in 2002 immediately after retiring from the Senate.[31]*
Kick a dog and he'll piss on your leg. Chunk a rock at him and you'll expose three other dogs to daylight. They're all dogs, dirty, low down, yellow dogs. And not a dime's worth of difference between them. It doesn't matter where Lipsky is from. He's from under the same rock as the rest of 'em.
I can't even remember which one was called the Teflon President. Hey, I voted for Barry Commoner, Ralph Nader, etc. Supported Kucinich this time around. Can't remember a single valuable reform Clinton made, although the body count was fairly low.
Bank lobbying kills cramdown provision championed by Obama as the centerpiece of his mortgage relief bill.
Bank lobbyists lean on Congress and defeat a key provision of new housing legislation - BloggingStocks
Move along...nothing to see here...just more of the same broken system.
yog: you need to keep up, elsewise you start sounding, well sounding less--Reagan was the Teflon president. He had a gift.
O! they chose Ginsberg-- Chrysler Creditors Ask U.S. Justice to Stop Fiat Sale (Update1) - Bloomberg.com
I will be surprised if they stay or hear it. She's a loyal troop, wouldn't want to piss off the wrong people. She, like most others, wants to hang on to the bitter end. Wouldn't be fittin' for one of her peers to stop by one day and 'suggest' anything.
Time still to revisit the land of Johnny Lee, from about 11:30 PM.
"Le Rouge et Le Noir: Chronique de 1830.The red and the black of the title are the contrasting colours of the uniform of the army and the robes of priests. "
Lawyerliz: "Red is the color of religious authority. Hence the red of cardinals. It was prolly very expensive
at the relevant time period."
Ah yes, the Revolutionary French took Parisien red and blue and Bourbon white in clawing back land from the Catholic Church, and why not go with a trend.
Blue and white go back to King David. Caesar took crimson, right? Sorry Liz, I gotta go with red as state authority, which the cardinals viciously guarded for a long time.
Mr Lee, Mr. Lee?
Don't know if cramdowns would get much support from the CR crowd, w. I certainly don't support the concept. Foreclosure isn't the end of the world. Renting really isn't that bad!
No by rule they had to go to Ginsburg first. It takes four, and she looks bad denying cert if they hear it and it influences BK law, which even Ben Stein knows is important these days.
I agree, but remember this was the center piece of Obama's proposal to appease the lumpenvoters.
I thought this would dovetail well with Volkers NYTimes link above.
No by rule they had to go to Ginsburg first.
yesterday you were opining as if you didn't know that, guess you cleared that up from the article
It takes four,
also, something you gleaned from the article
and she looks bad denying cert if they hear it and it influences BK law,
never gonna happen
which even Ben Stein knows is important these days.
BS is a great American
Part of the frustration with short sales is that banks and lender/servicers all have their own different policies and procedures when it comes to processing and approving short sales. Tanta gives us a snapshot of the human elements that go into a short sale approval.
Lately I'm hearing that high BPOs (broker price opinions, which are somewhat like a mini appraisal) in some markets are slowing down the short sale approvals.....unless the home is closer to the trustee sale date.
Vive Tanta's work.
I miss reading her long posts on Saturday or Sunday mornings. This ought to make some readers happy tomorrow morning.
From watching here in California, I think "in general" servicers are much more short sale friendly now (relative to 2008). I'm not saying it is speedy, just better now than it was in 2008. On the cleaner, single loan or even multiple loan but purchase money (no recourse to the borrower) contract the servicers have streamlined the process much more. I also think agents have gone through the learning curve and are navigating the process better then they were previously and that helps speed up the sales as well. With multi-loan refinanced (i.e. there is recourse to the borrowers) properties is where the longer wait times happens. Not all servicers / investors have their stuff together.. but in general there has been vast improvement in the last year. I've seen pre-approved short sale properties close escrow in a week from offer to close of escrow (all cash offer).
I don't recall a single Supreme covered in red. Those magic black robes. Presidents not so lucky. I know, Nixon set up LBJ's guy Fortas, but it isn't easy. Ginsburg has branch loyalty too, don't forget.
I used to know the procedural rules, passed the bar with flying colors, but now I mainly follow the bigger picture.
I got another fitty here, good odds even for non-gamblers...
What you said, NorkaWest...way too late atm for me to fully appreciate - up early with a big cup of coffee and a real treat
Tanta vive!
Anybody seen this little tidbit:
"The recession is driving the safety net of government benefits to a historic high, as one of every six dollars of Americans' income is now coming in the form of a federal or state check or voucher."
Benefit spending soars to new high - USATODAY.com
Louis D. Brandeis once said something like, "full disclosure is the best medicine and a light bulb the best policeman." Tanta has turned on a light bulb in the area of housing "short sales". Needless to say, more "medicine" and "policeman" are needed in other financial areas, too.
Somewhere in today's comments here, someone posted the NYT piece in today's or yesterday's paper about the need for full disclosure in other areas of financial transactions (stocks, especially block trades, simple and complex derivatives,etc). With each passing day, trading of these instruments remains opaque. "Clouded" trades mean wider spreads(equals higher profits) and more asymmetric information (equals higher margins for those with accurate information). Traders learned their lesson years ago when bid-ask spreads on the NYSE collapsed to penny differences between the bid and ask: there was no longer hardly any profit trading listed stocks compared to the risks. Now the good times are returning, where no one can tell if front running is occurring on "dark matter" trading venues or whether the price paid for a CDO is in line with the price paid at the upstairs trading desks where prices never get reported.
The authors are correct: all trades should be reported clearly and completely and traded only on exchanges where each and every trade is exposed to competition and price discovery.
A profitable, but unhealthy Wall Street depends on limiting competition and information about a trade, a financially healthy America depends on the quite the opposite.
EDITORIAL; Congress, the Banks and Derivatives - NY Times
Why limit it to stocks? Trade in anything that doesn't implicate privacy issues should be recorded to an open source database. The bots can handle it, the grocery store does it now with bar-codes, and privacy can even be accommodated.
One world currency.
I don't think the one-world currency will work but I sure get a kick out of your thoughts, Yogi.
You're a stand-out character in a lobotomized world.
Only has to work better than the next best thing. Those banksters didn't need gunpowder to get their bailouts, they just tied themselves together at the hip (the big sticks still do their talking, I realize).
BH if you sign a contract longer than 6 months, and you have any leverage, demand a CPI factor. Weren't you the guy who mentioned that French technology writer on the speed of information?
The only thing I know about the IMF is the Third World seems to universally hate them.
If you offer an habitual poker player the choice between paying $50 up front for the seat for a whole day and night, or $4/half/hour, he'll gladly get nickel and dimed, even if he knows he's going to play for 12 hours. He can do the math in his head, but he won't.
The minimum payment scam preys on even people who should know better. Sometimes it takes two to form a debt slave relationship, but in a lot of places it only takes a couple of holes in the social safety net.
From the meat of Judge Gonzalez' order:
"Here, the Debtors have established a good business reason for the sale of their assets at
the early stages of these cases. Notwithstanding the highly publicized and extensive efforts that
have been expended in the last two years to seek various alliances for Chrysler, the Fiat
Transaction is the only option that is currently viable.[emphasis mine] The only other alternative is the
immediate liquidation of the company. Further, the whole enterprise may be worth more than
the sum of its parts because of the synergy between Chrysler, which provides its network of
dealerships, its productions of larger cars, and Fiat, which provides the smaller car technology,
and the access to certain international markets."
OK for starters, it's bass ackwards. If a sale to Fiat is currently the only option available, that's a reason to delay the sale, not rush it. Polaroid's creditors just got a quick sale thrown out because there was no bidding process. Maybe Chrysler shopped itself to every carmaker in the world, but the Judge doesn't say so. Only a vague "In that regard, no bidder other than Fiat came forward." "Network of dealerships" is weak. The old dealership model is dead. Most Mercedes buyers already or will soon order direct from the factory. Access to international markets for big Chryslers? Didn't do much for Daimler. The Chinese already have their Hummers (unless their regulators nix it, which is likely).
(cont.
"Moreover, the Debtors were forced to cease operations in order to conserve resources.
That action, however, was done with a view towards ensuring that the facilities were prepared to
resume normal production quickly after any sale, and that consumers were not impacted. Any
material delay would result in substantial costs in several areas, including the amounts required
to restart the operations, loss of skilled workers, loss of suppliers and dealers who could be
forced to go out of business in the interim, and the erosion of consumer confidence. In addition,
delay may vitiate several vital agreements negotiated amongst the Debtors and various
constituents. Thus, approval of the Debtors’ proposed sale of assets is necessary to preserve
some portion of the going concern value of the Chrysler business and to maximize the value of
the Debtors’ estates."
"loss of suppliers and dealers who could be
forced to go out of business in the interim,"
Might be a good thing. Let them reorganize and make better deals with New Supplier and New Dealer.
There are no numbers given for the extra costs from delay so there's no way to evaluate the Judge's arguments. A quick sale to get production running again doesn't give me confidence as a consumer. I'm buying a $20,000+ item which can kill. Take your time, get it right.
The special considerations for quick sales come from rotting fish on the docks cases.
Quick sales of big car companies pushed by the government smell fishy.
"Here, the Governmental Entities, as lenders of last resort, are dictating the terms upon which they will fund the transaction, thereby leaving the Debtors with few options. Nevertheless, the usual marketplace dynamics play out and the Court applies the same bankruptcy law analysis. Moreover, the Debtors' CEO testified that the demands from the Governmental Entities were not greater than that presented by other lenders, and in some aspects were not as onerous.... "
Yeah that's the problem Judge, they're playing with TARP taxpayer money. Courts should take extra care to make sure bidding processes are respected and not rushed, given the potential corruption.
OT? perhaps, perhaps not:
Why won't G. Brown resign?
How many times must he reshuffle his cabinet? How many ministers must resign? Why did he keep his Finance Minister?
When is the soonest date when he must call an election?
-- How many times must he reshuffle his cabinet? How many ministers must resign? Why did he keep his Finance Minister? --
Its pins and needles for the UK Govt. and the £.
edit: Maybe Brown is trying to arrange a short sale.
"I'll give you a special first draw right, Nicolas, if you'll take my note for a bit. Shall we say pistols, Chunnell at dawn? I'll bring my Balls, as second. Tim has a bazooka, but Putin has become a hard money honcho, and who knows what Hu will bring. Those guys actually still make things with their hands."
Don't get me wrong, I'd rather see TARP money go to just about anything more productive than a bank, but corporate bk is a bailout already, no need to cut corners.
The sale price of 92% is pretty optimistic. Take it down to 55% - 90% financing and 50% reduction fro peak sale price - and your loss calculation comes to 97%. Granted, legal fees on a more expensive home will be a smaller percentage. Look at condos too where the price may be 1/3 or 1/4 of peak, and many more of those used 100% financing.
Lenders that were 'walking away' from short sales were using the same judgment they had used in writing the initial loan.
-- if you'll take my note for a bit. --
Oh Yeah! Monitize me baby!
YouTube -
Gresham's Law: rethought
Gresham's Law states that bad money drives out good money, and as a consequence it takes a bunch of bad money to get a meager amount of good money.
Confusing, but not really.
The Romans showed the way, way back when. I think they had the first bad money, a Denarius Alchemy Derivative.
The empire's money was copper, silver & gold. There were many denominations of copper coins, but strangely enough, only one denomination each of silver and gold coinage. The ratio was set @ 25 silver Denarii equaling 1 gold Aureus which lasted for hundreds of years. Like our current empire, Roman forts were far-flung and costly to maintain. The army had a long history of being paid for their efforts in silver Denarii, and the silver coins for several hundred years were of high fineness, (approx 95% purity) and as the accounts receivables weren't matching up with the accounts payables after the salad days were through, the debasement of the Denarius began, dropping down to 65% pure. The problem with debasing silver was you could only do baby-steps, for if you went too far in your efforts, and say, got to a 65% copper-35% silver mixture, the resulting coin would look more like copper, whoops~
Enter high technology...
Some wizard figured out how to silver-wash (a crude form of electroplating) copper coins, allowing the empire to produce Denarii with just a scintilla of silver in them, and the chimera ruse worked for awhile, but people got wise, and so began the great devaluation of the Denarius~
By about the middle of the 4th Century a.d., it took about 3,500 Denarii to equal 1 Aureus.
A more current example of Gresham's Law would be any Dime, Quarter or Half Dollar dated before 1965, consisting of 90% silver. Each of these denominations of which billions & billions were produced, now has almost 10x the face value in current bad money (copper-nickel coinage or paper money) in just silver content alone. When was the last time you received a pre-1965 silver coin in change?
Gresham's Law was in regards to metallic money, but in our world it's not so easy to decipher the good & the bad, as our money is more like mysterious neutrons than anything else.
So how does one differentiate between and betwixt what exists now in our digital world?
As ever more massive amounts of national financial symbolism are churned out via the mouse click, the only thing it does is mix with previously thought of good money and dirty it, but can you tell the difference?
I can't.
Bloomberg is cute: retail sales up in May!
Minor detail: Chryslers unloaded at any price. Haha dump it on the pension fund. Taxpayers got 'em covered...
Is there a Shell's Corollary? Any public company that can go bankrupt, will, with greater losses if it's creditors can be bailed out by the taxpayer.
The thing Tanta doesn't talk about is the consequences of the lender and servicer accepting a short sale. The lenders by accepting a short sale are forced to acknowledge a theoretical loss as an actual loss. Even delaying a mere month or two they are protecting the lender's balance sheet and continuing to book servicing revenue. In the case of the non-delinquent short sale the difference to the books and revenue stream is huge.
OK Dawg, my night shift is over, you're on.
Go FED
er, er.
-- In the case of the non-delinquent short sale the difference to the books and revenue stream is huge. --
Only the shadow inventory knows for sure.
Shorts and realized losses become material to the lender's portfolio and therefore the underlying asset class to the rmbs house of cards when? Sure, no one likes to book losses when vapor gains can mean real returns, but where's the material point?
Quasi o/t, some palindromic investor guy reckons the China thing could have legs:
http://www.reuters.com/article/ousiv/idUSTRE5560M120090607?pageNumber=1&virtualBrandChannel=0
C
And paging EHP, loonie and bond skrood:
An Error has occured | Reuters.com
C
What furnaces, what anvils, are not groaning with the forging of chains? That is how our iron is mostly used; and you may well fear that ere long none will be left for plough-shares, none for hoes and mattocks. Happy were the forbears of our great-grandfathers, happy the days of old which under Kings and Tribunes beheld Rome satisfied with a single gaol!
Juvenal Satire 3
"Until they ditch the First Amendment debtors are free to chat, and assemble."
"Defenders" of the First Amendment attack the First Amendment:
400 Students Defy ACLU and Stand to Recite Lord's Prayer at Graduation
A precedent?
When the energy bubble v2 pops this summer the Loonie will migrate south. NatGas revenues in the face of storage capacity are going to hurt and high cost sources will shut pushing unemployment up.
Anyway back on topic. "Shadow inventory" could better be described as induced loss exposure. If lenders start short sale transacting they might open the flood gates to more. Not in their best interests as long as loans are performing. IMO the lenders think they are managing their portfolios correctly from a macro perspective by not addressing individual situations until they become critical.
Lenders here are more short sale friendly, but actually doing the closing is agony.
The Lender's employees /agents haven't the slightest idea of what they are doing
and I see no evidence they are learning. The buyer's lender also has no idea what
they are doing either, except they are scared to death of making loans. Loans disappear
into "underwriting" for day, weeks, I guess in the hope the borrower will give up and
go away. Nor can you find out what the problem is. Finally they render a decision, which
usually involves asking for more paperwork, which could have been asked for
long ago, and then it disappears back into underwriting
again.
In the mean the REO lender's ignorant employees who neither know or care what
is going on, on the other side, give extensions of time one Chinese water torturing day
at a time. They conclude that the buyer is stalling or can't qualify, and not that the Lender
is and wants to be a collection of poorly paid ignorant jerks, who are terrified to make a
decision. Most of these buyers do qualify under FHA rules, and most of the properties
do appraise out.
Finally Tanta's summary does not take into account the high probability that the property will
drop significantly in value. Not only did that happen but here in South Fla, we prolly have
another 5-10% more to go. That of course involves a guesstimate, ie, thought, which
lenders are not capable of doing.
Had the lenders thought about it for a bit, they might have come to the conclusion that they
weren't anywhere near the bottom and granted a lot of concessions a year ago. They
would have lost less money. It is too late now. The walkaway mentality here is totally
accepted.
But someone would have had to make an unpalitable decision. Can't have that.
Yep, yep yep yep, Dawg, yep.
Accounting, which was supposed to insure accuracy is fostering lies.
Can someone explain to me the following from her example: 37% pre-foreclosure expense; 43% post-foreclosure expense. How does that come out to 14,800 and 17,200? I'm confused how the math adds up.
Okay; so I see she's saying of the $40k total loss; 80% of that loss is in the foreclosure expenses. Sorry I was confused a bit, still trying to sort out some conclusion.
Risk appetite is quickly sated with a nibble on short sales, especially seeing as a Govt. response is still being formulated. There are more delicious entrees to be found elsewhere..
This is a dead horse. The cleanup will be socialized.
I can't entertain even for a nanosecond that anyone here would invest in short-sales workouts. Its laughable.
What I'm hoping for is after the next drop in housing values the lenders capitulate in the face of cascading losses and continuing inventory. We see it all the time in so many aspects of financial decisions. They ignore, delay, bargain and finally capitulate. When the lenders discover that they don't want to be property managers that will be the time. It will happen faster in high carrying cost places, those with high property taxes or HVAC loads but it will happen everywhere unless banks get regulatory relief from government which will delay the process and increase the losses.
If I had a quantity of a highly desired collectible, it would behoove me to slowly release them into the marketplace, for if I were to flood the market with 1,000 cherry 64' GTO's, or 500 Brasher Doubloons or 200 upside-down Jennys, the market would collapse in each instance...
The Unabankers are not only hiding losses by holding back foreclosures, they are delaying home values from pile-driving into the ground.
So far-so good.
More from the "Canucks are Cranky" file:
Canadians angered over Buy American rule
| Reuters
C
They are starting to capitulate here, but the capitulation takes the form of all kinds of
weirdness.
I posted before, but there is still no end to the story. Buyer waterboarded by lender, but is clear to close,
a couple of days late, after contract. Seller puts the property back on the market, for 29k less. Buyer finds
out and doesn't want to pay previous sale price. There are all cash offers (maybe they aren't really, here
in fraudulent Florida) for the 29k less. Seller sez they will sell at lowered price to anybody but old Buyer.
Seller capitulates and is now selling for 24k less to old Buyer. Old Buyer has a family emergency in
Guatemala and has to leave town. I do a Power of Atty which I warn nearly nobody accepts. Buyers'
bank doesn't say yes or no to P of A. More time passes. Buyer comes back from Guatemala.. . .
No package yet. Will contract run out again. Will Seller lower the price again, unnecessarily.
Oh, and nobody has told the lender that now they have to loan less, safer loan, for fear this will
trigger unknown craziness and refusal to close. Hmmm, appraial no good any more? Too high?
Must do it again. Must go into underwriting again . . .
Liz isn't making any money on this one.
Off 45% is pretty pile driving into the ground. Off 55% will be more so.
Fancy towers and condos will be much worse.
Unabanker artist's sketch:
The only known sighting of the Unabanker was in a hoodwink.
You know Pavel, I might have recited the prayer along with the students, just to frost the ACLU.
Maybe I would have recited it backwards.
Maybe I would have chanted Ommmmmmmm along with them.
Common sense has gone completely out the window.
Yogi - still calling Mr Lee. The code is broken. The dog is turning red.
YouTube - Television - Call Mr Lee
C
liz,
It seems like $10 an hour has replaced the $25 an hour jobs, and 3x annual salary for a home @ $10 an hour means there's a whole lotta pile-driving price demolition derby still to watch...
Thank you, CR for posting this. I forwarded it to my realtor fiancee, who will benefit from explaining this to her clients.
I miss Tanta, too. She provided a voice of reason in the middle of this ongoing insanity.
Juvie, you have common sense. The banks don't.
If you had those collectibles, you would not necessarily have a desparate need to unload them quickly for money.
But if you did and If you had some one about to breaka your knees,
you might offer the batch to the creditor, with an explanation
of how to get rid of them slowly. It might be accepted. Your knees might be saved. None of this logic applies to
any of the parties involved.
Banks are not in the houses business. They are in the lending business. For them trading in houses is fraught with peril. They know how to trade paper, it's what they do. The idea of houses as desireable objects is tarnished in the eyes of the beholders and the banks don't want to even be holders.
JK Galbraith said the function of economic forecasting was to make astrology look respectable.
In that case, the function of technical analysis is to induce side-splitting laughter:
FT.com / Investor's notebook - Traders keep anxious eye as key indicator offers 'buy' signal
C
They know how to trade paper?
Not any more.
Like it or not they are now in the house selling business for the foreseeable future, and
they'd better learn to do it well, or they are up the creek. Well, they already are up the creek,
further up an even more polluted creek?
Homes were/are by a wide margin the most expensive thing most of us mere mortals have ever bought...
As if the banks didn't want a piece of that? ha
Somebody days ago, regarded individual house selling is 'granular". Yep.
Houses are not a symbol. They are individual unique material objects. This makes
them harder to deal with than money. It means that people have to be hired to
take care of them and sell them and make decisions. It means that they can't
do things the old lean way, or they will lose even more money.
So it means that they will lose even more money.
Rotten house meme anyone?
It means they won't even try to get a receiver appointed in the case of
rental property. Which is good for my clients.
-- Like it or not they are now in the house selling business for the foreseeable future, and
they'd better learn to do it well, or they are up the creek. Well, they already are up the creek,
further up an even more polluted creek? --
The house (re-)selling business has been collateralized has been trading for pennies on the dollar.
Smart banks have taken their write-downs and moved on.
I pity the befool
(with apologies to Mr. T)
Upside down Jennys?
Tanta Vive!
The sooner we deflate the wages of the parasite economy(hint: the majority of pre and post foreclosure expenses), the better.
That is one way, more of these deals will start to make sense.
Bill Gross had 1/36th of a gross of them, but traded for a z-Grill.
Stamps I believe.
Much of the pre and post foreclosure expense is interest, not paid or foregone because there's no
income stream. Houses need to be kept in repair. In some cases water needs to be flushed through
pipes. None of this is parasitic, just necessary. And the repair part has mostly not been done.
What bank has taken its losses and mored on??
Name one. I will put my money there.
How much is a gross? 144?
-- Name one. I will put my money there. --
Credit Suisse for example swallowed the bitter medicine early, largely and frequently.
There are a few European Banks that have written off several Icelands.
dont you believe it (profile) wrote on Sun, 6/7/2009 - 7:28 am
-- Name one. I will put my money there. --
Credit Suisse for example swallowed the bitter medicine early, largely and frequently.
Three words: Baltic States Exposure.
UPDATE: http://www.stratfor.com/files/mmf/7/c/7c1eeded9191a6ddc6b0ea73a107df0c85573cc0.jpg
Poor Austria.
-- Three words: Baltic States Exposure. --
My understanding of the Baltic States issue is that it is one of Sovereign Currency Risk, and not tied specifically to any Swiss Bank. The majority of the Fonds were underwritten by Austrian banks. But many of those Austrian bonds were issued in CHF.
As Switzerland continues to intervene in their currency market to ensure a weak Franc the Lativian situation may not be all negative.
There's a shitlode of millions or just a few billions in a Gross.
Counterpointer: re: Coppock (coprolite!) maneuver:
"Mr Coppock looked at bear markets as akin to personal bereavements and decided to use the average time it takes to mourn a death (11-14 months) as the basis for his measure.
Accordingly, the Coppock indicator is the sum of a 14-month rate of change in an index and 11-month rate of change. This is then smoothed by a 10-period weighted moving average."
ROFL!
It's a hopped-up bandpass filter. That's FIRritating.
Phrenology looks respectable compared to anything Dismal Scientists can come up with nowadays...
Coprophagic, even.
Like this:
FT.com / US / Economy & Fed - Steep fall in US job cuts ‘encouraging’
Ghesh...
C
hahahahaha, Juvie.
Hank Paulson was a high-water mark in modern phrenology.
C
Hqahahahahahah, C.
How is Lithuania doing? My best friend is of Lithuanian ancestory and speaks and writes it
fluently.
Is speed racer cobra driver?
developer can't sell luxury condos; converts them to homeless housing.
City turns upscale building in Crown Heights into homeless shelter
I thought it would happen in downtown Miami/Miame beach first.
In fact I actually suggested to some homeless shelter providers that
they start negotiating for one of these buildings.
Heh, the new BSE...
LawyerLiz,
What do you think one of those towers will sell for when everything is said and done?
I'm thinking the commentariat here could buy one outright - no mortgage - set up as a co-op.
-- How is Lithuania doing? --
IMF Global Financial Stability Report
Ch. 1 pg 19
In light of the substantial challenges that emerging market corporates
face, maturemarket investment managers are loath to allocate resources
toward the corporate debt market. Emerging market corporates had not
yet become an established asset class prior to the crisis, with
relatively few funds benchmarked to the main emerging market corporate
indices. Now, most corporate bond funds have been suspended, with
only a pool of fairly illiquid assets remaining under management. The
overhang of illiquid assets, combined with the general retrenchment
from emerging market assets, will make it difficult to regenerate an
investor base for emerging market corporates that could underpin a
revival of primary markets. Domestic financing is not likely to be a
sufficient substitute.
In emerging Europe, corporate external refinancing needs for 2009 are
especially large relative to the size of domestic credit
markets. There are hardly any markets for domestic corporate bonds in
emerging Europe, and external private refinancing needs amount to more
than 50 percent of domestic bank credit to the private sector on
average in the region.
Not so good, but probably a better bet than houses.
dont you believe it (profile) wrote on Sun, 6/7/2009 - 8:18 am
-- How is Lithuania doing? --
Not so good, but probably a better bet than houses.
Perhaps not as bad a houses but then most houses don't have a hungry bear at the back door.
About a year ago, one of my clients got an offer accepted for something like 350, for a unit that had sold in the 800s.
No slouch he, he said he would take it only if they guaranteed assessments wouldn't go up for a year. They wouldn't; he didn't buy.
That's just one unit. You don't want a co op here. The legislation exists, but isn't used.
So, say the mkt has gone down another 20%. That would get you to 280k.
Lots of deferred maintenance stacking up.
Prolly some units sold, some rented by developer, some by buyers, some in foreclosure, some vacant.
A mess. There are some buildings where it appears to me that nobody has moved in since they
aren't quite finished. I dunno. I only drive past them.
Many lenders have blackballed any condos on any terms.
I wonder what Wheel of Fortune is like in Lithuania?
You really get your money's worth when you buy a vowel...
Liz,
Often when you "finish" a unit or building you trigger loan covenants. Thus you see a lot of desperate developers on the verge of finishing but not quite.
Juvenal Delinquent (profile) wrote on Sun, 6/7/2009 - 8:23 am
I wonder what Wheel of Fortune is like in Lithuania?
You really get your money's worth when you buy a vowel...
"Are there any umlauts Alex?"
"Yes! 14 of them. Pick up that trip to Khazastan and spin again."
-- Perhaps not as bad a houses but then most houses don't have a hungry bear at the back door. --
That hungry bear has huge foreign reserves, $400B in treasuries.
Better a hungry bear than a dead eagle.
My small developer buddy finished--they have co s--a couple of houses about 2 years ago. One had no mtg.
One did. When finished, you are supposed to get permanent financing. They have not been hounding him.
They are happy to get his monthly payment and leave it at that.
I doubt that lenders of millions on a big condo building would be quite so forgiving, understanding, and
sensible. Moreover, where are the developers gonna get the huge interest money?
There are time limits on these loans too.
"Often when you "finish" a unit or building you trigger loan covenants. Thus you see a lot of desperate developers on the verge of finishing but not quite."
Mexico becomes U.S.
Go to any city down under, down Mexico way and you'll see construction halted in nearly done buildings. I remember watching a hotel finally getting finished over a 10 year period in Rosarito Beach, but also many other structures abandoned in various stages of completion-to fully completed buildings...
They are very nice looking from the outside. I wouldn't mind buying one for 10 cents on the dollar--if they were sold
out and a huge maintenance cushion was provided.
The Baltic states aka the old Free Cities, are tiny. I kind of doubt they're capable of doing that much damage.
I'm very curious about who the bag holders are for the Dutch and Dubai housing bubbles though.
-- w
I agree...
The Baltics are just a read herring lure, minnows.
Liz,if you buy the entire Condo building (empty) you can rent it out,then move to lease/purchase with the tenants who qualify.I think the condo's here in CA are usually better built than the SFR's since they had to pass inspections after meeting tougher codes.Many SFR developers in CA were allowed to hire their own inspectors because county inspectors were overwhelmed...the quality of many recent houses is AWFUL,they will require multiples of the usual maintenance costs and in some cases are not worth even trying to fix...2 and 3 year old places that sold for $500k plus...
Thanks CR - that was really a good read.
I had been talking to some 'bank agents'... realtors working closely with banks trying to find income property near the U of Minnesota [my kids will be captive renters there for at least three years]... this sums it up pretty well:
"My view is that, realistically, only the short sales with delinquent owners stand much of a chance of getting “passed” by servicers, and those few are being overtaken by events, namely, such a rapidly falling price environment that it’s hard to get that $84,000 bid and make it stick long enough to close the deal. This part is where servicer inability in so many cases to “just pull the trigger and close the deal” is hampering things, that being mostly a result of securitization rules requiring servicers to get investor/trustee approval, plus the endlessly updating numbers on those “models” that the servicers are using to find the “trigger point” where a short sale makes sense." - Tanta
My contact told me they still have a difficult time pulling the trigger - that in effect not much has changed from the time Tanta wrote this. As a result almost all go into foreclosure and experience additional 'loss'.
Nothing much changes - the rock goes around and around the sun, we live and die, and not much in the way of human psychology ever seems to change.
Imagine the mindset of the average J6P or his fetching bettor half Jane Chardonnay?
A good percentage of these palookas were meant to be renters, but slipped into home ownership only via the one-size-fits-all credit looseness-and paid nothing down, and are about to get foreclosed on, and you and I can look at it rationally and see they are a year behind on payments and sinking fast, but for J6P and J.C., they are losing THEIR home, which never really was in the first place.
The clock is striking midnight for many a Cinderella Story...
-- The clock is striking midnight for many a Cinderella Story... --
Loosing the house is just the tip of the iceberg. Credit will be unavailable for years and years to come.
I seriously doubt that the average borrower could even read Tanta's article, much less understand it. Most people do not behave rationally or do any kind of planning at all - it's all emotion with them - and the car salesmen and furniture salesmen and jewelry stores are all counting on them too!
Its a puzzling question, "how does one bootstrap a service economy"? In the '30s USA had an industrial/agro economy. If it is necessary to transition from a stable industrial base to a service economy again, then lord have mercy on America.
California may be broke, but at Livermore they have the National Ignition Facility... Never heard of it? Probably most Americans would not have a clue - but they are paying for it - and after you see it you can only imagine what it cost to build...
Energy of the Future: Igniting a Star With Laser Light
Hopelessly pigged, but zow!